Reversible and irreversible ageing Franois Hran

1
Reversible and irreversible ageingFrançois Héran
I N E D

• GIP-SPSI Santé Protection sociale Expertise
  internationale
• Ambassade de France à Prague, Bratislava,
  Budapest et VarsovieCEFRESCentre français de
  recherches en sciences socialesPrague, 18th
  December 2008

2
The four factors of population aging
3
The 4 factors

• Population ageing high up the age pyramid (in
  French "vieillissement par le haut")
• Population ageing generated at the bottom of the
  pyramid ("vieillissement par le bas")
• Present backlash of temporary rise of fertility
  (the late impact of the baby boom)
• Selective emigration of the young cohorts (e.g.
  Albania)

4
The 1st factor of population ageing

• Population ageing high up the age pyramid
• (in French "vieillissement par le haut")
• Due to increased longevity
• Nothing to do with fertility
• The first factor of ageing in importance
• a 4th floor added to the age pyramid
• "unavoidable ageing" no room for any
  policy against it

5
Population ageing high up the pyramid (additional
floor due to longevity)
6
The French case Age pyramids in 2005 and 2050
(INSEE demographic prospects)
7
The 2nd factor of population ageing

• Population ageing generated at the bottom of the
  pyramid ("vieillissement par le bas")
• Secular decline of fertility under replacement
  level, below 2.05 children per woman
• due to deep reasons ("2nd demographic
  transition")
• generalized participation of women in the LF
• raising costs of education
• contrast between individual autonomy (esp. women)
  and rigid family structures
• "avoidable ageing", open to pro-active
  policy (in principle)

8
Population ageing at the bottom
9
The 3rd factor of population ageing

• Present impact of temporary rise of fertility e.
  g. the backlash of the baby boom
• In the first decades large birth cohorts
  rejuvenate the age pyramid
• in the following decades, they make it older
• Strong impact but limited in time
  "Unavoidable ageing"

10
A temporary additional fertility (baby-boom)
which first rejuvenates the population
11
but 40 years later makes it older
12
The last backlash of the baby boom

• End of a long period of stability in the number
  of deaths due to
• the decline of mortality
• the depleted fertility of most countries between
  the two World wars
• The baby boomers will finally reach the end of
  their lives in the coming decades
• Hence an unprecedented increase in the mortality
  rates
• A strong reduction of the natural increase,
  including in France (in spite of the 300.000
  record registered in 2006)

13
Few deaths in France for the time being, but
baby-boom cohorts will change it Female deaths
by age in 2004
14
The raising number of deaths in Europe, 2000-2050
(for 100 deaths in 2000) UN Prospects, central
variant
15
Annual number of births and deaths in the 25
EU1960-2050
16
As a result in France too, the natural increase
will inexorably decline in the next
decades(Insee prospects, medium variant)
17
Can family policy or immigration policy counter
population ageing?

• A graphic illustration of the widening gap
  between the rate of growth of the elderly and
  that of the population in active age (United
  Nations demographic prospects, 2006 revision)

18
Source UN demographic prospects (2006) in a
selection of countries

• The graphs give the growth of three age groups
  65, 15-64, -15, indexed to 100, over 2000-2050
• Basis the "medium scenario", prolonging the
  present trends, with a convergence close to 1.8
  children per woman in 2050
• The "high variant" an additional fertility of
  0.5 child
• eventually 2.35 instead of 1.85 (a considerable
  change)

19
An illustration of the divide between "avoidable"
and "unavoidable" ageing (2)

• The widening gap between the 65 and the 15-64
  (or 15) curves displays the relative population
  ageing
• countering population ageing would mean closing
  the gap between the two curves ! (see last
  scenario of the UN report on "replacement
  migrations")
• The slim difference between "medium" and "high"
  fertility variants illustrates the capacity of a
  pro-natalist policy to maintain the active
  population over time
• A limited impact, compared to the impact of
  increased longevity

20
Population aged 65, aged 15-64 and aged -15
ITALY 2000-2050 (per 100 persons in 2000)
21
Population aged 65, aged 15-64 and aged -15
GERMANY 2000-2050 (per 100 persons in 2000)
22
Population aged 65 and population aged 15-64
POLAND 2000-2050 (per 100 persons in 2000)
23
Population aged 65, aged 15-64 and aged -15
JAPAN 2000-2050 (per 100 persons in 2000)
24
Population aged 65, aged 15-64 and aged -15
FRANCE 2000-2050 (per 100 persons in 2000)
25
Population aged 65, aged 15-64 and aged -15UK
2000-2050 (per 100 persons in 2000)
26
Population aged 65, aged 15-64 and aged -15
RUSSIAN FED. 2000-2050 (per 100 persons in 2000)
27
Life expectancy of women
28
Population aged 65, aged 15-64 and aged -15 U S
A 2000-2050 (per 100 persons in 2000)
29
Population aged 65, aged 15-64 and aged -15
CHINA 2000-2050 (per 100 persons in 2000)
30
Conclusion (1)

• Sweden, UK or France a population policy
  supporting the fertility rate is able to maintain
  the active population over the next decades
• Italy, Germany, Poland, Japan it will fill but
  a part of the gap
• In all EU countries, however, the increased
  longevity accounts for most of the population
  ageing process (France is no exception)
• In spite of its strong fertility, USA will not
  escape from the ageing process
• Russia will, to some extent. But this is bad
  sign people have no time to grow older. For
  most Russians, the privilege of an ageing
  population is out of reach

31
Conclusion (2)

• Immigration policy cannot counter population
  aging in Europe it brings only a slight
  retrospective correction to the fertility rates
  of 30 years ago
• however, immigration is essential to maintain the
  absolute numbers of active population and
  contribute to the good working of home care and
  institutional care
• Finally, population ageing cannot be compensated
  forby any population policy
• neither policy immigration
• nor family policy
• If population ageing is a demographic issue,it
  does not call for a demographic solution

32
ANNEX 1 Two children per woman in France in
2006 is this due to immigration?

• Source INSEE data, exploited by François Héran
  and Gilles Pison, "Two children per woman in
  France in 2006 are immigrants to blame?",
  Population societies, 432, March 2007
  (downloadable from http//www.ined.fr/en)

33
A large contribution to births may go with a
limited impact on fertility

• It is often claimed that the French fertility
  rate is due to foreign population
• Surprising though it may seem, the foreign
  population brings a large contribution to births
  but a limited impact on fertility (see graph)
• 2005 94 000 babies born to a foreign mother out
  of 774 000 12
• This raises the national fertility rate by just
  0.10 child, from 1.8 (for French women) to 1.9
  (for women of all nationalities)
• Explanation
• Foreign women have 1.5 child more than the
  nationals
• But represent only 7 of the female population of
  childbearing age
• ? the 1.5 additional child accounts only for
  7 in the national rate
• The impact of foreigners on the number of births
  depends more from the extra number of foreign
  women than from their extra fertility
• If we take immigrant rather than foreign women,
  the contribution to births increases, while the
  contribution to fertility gets smaller
• since the immigrants have arrived at an earlier
  age, they resemble more native French women in
  terms of fertility

34
France 1980-2005 the limited impact of
immigration on the national fertility
rate(Source Population societies 432, March
2007)
35
ANNEX 2 Family policy in France in the
European context
36
Social protection benefits in France,
2003Distribution of risks (or functions)
Total amount 465 billions 30 of GDP
37
Social protection benefits for the families in
Europein cash and in kind, in of GDP)(tax
cuts excluded, as well as school services )
38
Some traits of the French family policy (see P.
Strobel and O. Thévenon)

• Complex and not always consistent
• More than 30 measures (not easy to evaluate)
• Means-tested benefits (for social
  redistribution), but also tax cuts (quotient
  familial, tax-splitting system")
• Combines social policy and family policy, by
  helping altogether disadvantaged families and the
  well-off
• Still wavering between extra support to the 3rd
  child and benefits from the 1st child
• But quite consensual and politically neutral
• Unquestioned in the last electoral debates
• More feministic then familistic
• No need to be married no need to stay home
• Strong support to the one-parent families
• A 70-year continuity that inspires confidence in
  the population

39
France 2003 Social protection benefits in
"Family" and "Maternity" functions (billions )
40
The actors of the French family policy

• 60Social Security system through its "Family"
  branch
• CNAF (National Fund for Family Allowances)
• not synonymous with the State

• 14local authorities
• municipalities
• départements

• 8the Stateas an employer

• 12other Social protection regimes,
  complementary funds

• 6private employers

41
Cash benefits do not include all benefits

• See also benefits in kind, not counted in the
  "family" or "child" risk, i.e. subsidies to
  equipments or facilities used by the children
• Such as
• Housing allowances
• Schooling transportation
• Subsidies to "cantines" at school
• But above all the universal pre-elementary
  school
• 100 of the children enrolled at age 3 (world
  record)
• 35 of the children enrolled at age 2 (generally
  mid-time)
• With teachers of same training and level as in
  primary school
• a "public good", free of charge for the
  families
• Origin demanded by the working-class families in
  the 30's, then extended upwards, up to the
  bourgeois families

42
A few words about the "quotient familial"

• The "quotient familial" (tax-splitting)
  diminishes the marginal rate of taxation of the
  household according to the number of "parts" (or
  shares) attributed to the household
• The number of parts depends essentially on the
  number and birth order of the children
• 1 part for each spouse or partner
• 0.5 for the 1st child (becomes 1 in case of
  one-parent family)
• 0.5 for the 2nd child
• but 1 part for each child from the 3rd on (adds a
  semi-part)
• The taxable income of the household is divided by
  the number of parts, hence the importance of the
  additional semi-parts to reduce the household
  taxes
• However, the resulting tax cut is limited by a
  ceiling

43
What is the impact of the "quotient familial"?

• Most controversial issue in France
• Concerns only the tax-payers (half of the
  households in France)
• According to a simulation model this is an
  additional expense of 10

44
How is generally assessed the impact of a family
policy?

• Rather easy to evaluate the impact on income
  disparities ("redistribution effect") and the
  "child cost"
• measurable through simulation (before/after
  comparisons by types of households)
• See review by Letablier Thevenon for EU DG
  Employment (2008)
• More difficult to assess the impact on the
  fertility rate
• Too many parameters
• Constantly changing (difficult to isolate the
  "pure" effect of a specific measure)
• Confusing variables, such as economic situation
• Few harmonized data between countries (see
  however the aggregates defined by the ESSPRO
  system of Eurostat)

45
Impact on fertility rate?

• Few studies
• Hantrais Letablier (1993)
• Blanchet (1994)
• Ekert, Randall et al. (2001)
• Breton Prioux (2007)
• Evaluated impact
• Between 0.1 and 0.2 attributed to the fiscal
  measures, compared to the English system
• But, on several decades, this is a significant
  surplus
• Impact on the 3rd birth (more on tempo than on
  quantum)
• More studies needed at a comparative level